Business Lines Of Credit Make The World And Your Company Go Round! Canadian Working Capital And Secured Facility Information .

Smart Businesses Have A Business Line Of Credit

Information on business lines of credit in Canada . How does a secured facility work and why is it necessary to have a working capital revolving credits.



Did you hear the one about the Canadian firm that went out of business because they were too profitable and growth was great? That's an ironic statement to many business people, but the reality is that profits don’t equal cash flow and business lines of credit via a secured facility is the capital you need to survive all that success .

It's actually pretty simply when you think of it but because your firm has made that investment in accounts receivable, inventories, and other working capital assets you need operating loans to make your business work - on a day to day basis.

It's pretty safe to say that if you running out of cash or working capital, whether you're a FP 100 company in Canada, or all the way back to a start up is a concern for any business person , And of course the business papers are full of those stories everyday .

So that’s put us squarely in front of the bank with the proverbial tin cup in hand !Yes there are numerous alternate sources of cash flow and working capital, but our focus here is on bank secured lines of credit . Oh, by the way, there aren't really business banking unsecured lines of credit for your business, so we're in a narrow field here!

Canadian chartered banks do it a bit differently when it comes to operating lines and lines of credit. They take an assignment of your assets (just in case!) and wrap this security agreement into a demand loan type arrangement. These are typically reviewed on an annual basis.

How much you ' get ' from your secured facility is, in general, pretty standard. Typically that’s 75% of what is called your ' eligible ' receivables, which are those clients of yours under 90 days and within North America. On occasion clients that have extensive foreign receivables are required to compliment business lines of credit with export credit insurance from government organizations such as EDC and some other private firms.

Inventory margining under business lines of credit is a bit trickier. It is rare you can achieve 50% borrowing value, and all sorts of analysis might be required on the type of inventory you wish to finance.

Giving due credit to the banks its safe to say that any type of inventory financing for capital purposes is risky, and any lender rarely gets back what they have loaned out on this asset class.

One of the areas that work well under a secured capital facility is that your borrowing is your own business. There are no client notifications, and your customers would really only be notified in the event of a default by your firm. In this case your customers would be asked to pay the bank directly, which only makes sense.

If there is one danger area in a business line of credit it is simply the fact that your business should use these funds for short term working capital. Taking these funds you have borrowed on a short term basis to buy equipment or make longer term corporate investments generally leads to problems.

If you're uncomfortable with banking terminology, which banks offer what business services, or want to learn about any potential downside in business banking consider speaking to a trusted, credible and experienced Canadian business financing advisor.




Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/business_lines_of_credit_secured_facility_capital.html

Getting The Most Out Of Canadian Lease Pricing and Best Lease Rates? Here’s How Capital Equipment Finance Works

Canadian Lease Financing – Rates and Terms



Information on capital equipment financing in Canada . How can Canadian firms attain best lease rates and lease pricing that is attractive for asset acquisition finance strategies.



How can we get the most out of lease pricing, including by the way getting best lease rates in Canada what we access capital equipment finance via an equipment finance strategy? That’s a typical client question and we'll explore some answers, tips, and strategies in that area.

If there is a threat or disadvantage to equipment financing in Canada it’s a pretty simply one - being unaware of what areas can impact the advantages of a lease, for example a simple ' end of term ' option.

We wouldn’t want to count the probably thousands of firms in Canada, both small and large that fail to both understand, and then invoke their financing option when the lease ends. Ironically the more sophisticated and larger corporations in Canada even do worse on this one simply because they are too big and their systems ' forget ' whats going on within the tens or hundreds of equipment leases they manage.

So how can an end of term option be costly ?You quite frankly wouldn’t believe it, but the reality is that many leases are structured , and documented, by the way to make your firm keep paying if the notice or obligation you signed up for isn’t handled properly .

So by not returning, buying, or formally extending a transaction you are now in the position of pretty well ‘paying forever’. And that’s not a good thing. Imagine leasing, for example, a 25k large document copier or some other business asset, paying for it in full of 5 years, with interest of course, and then paying for it again. Wow! Oh, and by the way, that asset has depreciated and has been replaced by newer technology. Now how do you feel?

In Canada the Canadian capital equipment finance industry, the ' lessors ' are in a position to offer you a variety of pricing options. It is that variety of options that can really confuse Canadian business owners and financial mangers.

You can simply lease pricing in Canada , and achieve best rates at the same time by doing some basic homework around the two types of leases , capital ( aka lease to own ) and operating ( aka lease to use ).

If you are looking to finance assets that depreciate quickly or must constantly be upgraded to keep you company ahead of the curve then an operating lease strategy really works - Computers and computer systems are a classic example of a solid use of an operating lease . The benefits include lower monthly payments, return and upgrade flexibility, and your ability to simply replace the system or technology at the end of term. That’s when best lease rates are truly achievable when compared with lease to own type strategies.

Simple lease finance strategies can also lower that monthly payment - they might include a bargain purchase options at the end of the lease, which simply lowers your monthly payment and allows you potentially to refinance that end of term amount later on.

In Canada your interest rate on lease financing is determine by your firms credit quality, as well as the type of asset you lease, and who you are dealing with. The industry is very segmented and fragmented, so the right lessor as a partner can save you thousands of dollars over the term of a financing relationship.

To achieve best lease pricing, as well as terms, speak to a trusted, credible and experienced Canadian business financing advisor who can help you maximize the benefits of this powerful capital equipment finance strategy used by thousands of business owners everyday.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/lease_pricing_best_rates_capital_equipment_finance.html

Nightmare On Receivable Financing Street ? Understanding How Canadian Business Factors Price A/R Factoring In Canada

Understand And Achieving Good Factoring Rates in Canada


Information on receivable financing in Canada . How to win the rate game at factoring and business factors pricing .




Sounds like a great name for a movie right? Well, maybe not, but Canadian business owners and financial managers seem to have one large struggle with the cost of receivable financing from Canadian business factors. But when you understand how the cost of this finance vehicle works then factoring, aka ' receivable finance ' suddenly becomes a lot more clear, and desirable. Let’s explain.

In A/R finance it's all about making the use of your second most liquid asset, your receivables portfolio. (Cash is of course a bit more liquid!)

So when you understand the true cost of the method of Canadian business finance you all of a sudden potentially realize that you are immediately more productive from a working capital and cash flow point of view.

When we step back it's somewhat immediately obvious that your uncollected A/R is only doing one thing on that left hand side of your balance sheet. Its both unproductive, hasn’t allowed you to realize your profits, and in effect is costing you money. That's a triple threat for sure!

So why then is the cost of the receivable financing solution from Canadian business factors such a mystery or concer? It’s simply that the issue is either poorly presented, or more commonly, just plain misunderstood.

While the business owner or his finance person stares into the cost of A/R finance he often forgets the carrying cost of his A/R portfolio that stands there uncollected. This can be analyzed and calculated in a number of ways, including the discounted cash flow model, but we don’t want to get too overly technical when in fact things can be explained a lot easier than that.

If you are going with a traditional method of a/r finance in Canada (and by the way, that’s not our favorite or recommended one - we prefer ' confidential receivable finance ') the other factors that affect your a/r costs are administration around your collections, the lost sales you are losing by having to instead carry your a/r, the financing costs you currently are absorbing, and of course the cost of a potential bad debt if the receivable is uncollected.

As we noted, the best solution, in our opinion, for factoring in Canada is a confidential invoice financing facility whereby you bill and collect your own receivables without any interference from your finance partner. At the same time you receive all the benefits of factoring, which include immediate cash flow advances on your A/R, allowing you to operate, and grow. This facility, as well as more traditional one offered by many does in fact take care of the time cost of your current A/R.

Receivable finance actually is a lot more simple a process then you think. You receive the cash from selling your A/R on an ongoing basis, giving you the ' opportunity ' to reinvest cash more quickly into your business. In Canada A/R financing ranges in the 2-3% area assuming a 30 day collection period from your clients.

Depending on how you allocate your time, admin, lost opportunity, and current financing costs you might find by some carefull analysis that your current costs are anywhere from 10-20% on a 2-3 month uncollected receivable .

Bottom line today? Simple. Understand the costs of your current a/r financing and investigate how you can turbo charge your cash flow via a receivable financing solution . Speak to a trusted, credible and experienced Canadian business financing advisor for help on cash flow finance.









Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/receivable_financing_business_factors_factoring.html

No Brainer Financing - Equipment Funding and Leasing Services In Canada

Smart Asset Finance In Canada Starts With Leasing


Information on equipment funding and leasing in Canada. Utilize asset finance services for maximum benefits and minimal downside risk .


The business ' no - brainer '. A sometimes overused term that means of course an easy solution that’s ' obvious'. That’s more or less how we feel about equipment funding and leasing services in Canada. Let's explain why.

Given the amount of businesses that use lease financing in Canada (approximately 80%) it’s clearly a fact that whether your firm is a start up or one of Canada's major corporations that leasing services in Canada solves asset financing challenges and problems. Rarely does one form of Canadian business financing address the ' numbers' and ' budget' challenge so effectively.

We supposed that if you consider that Canada's FP 100 largest firms consider leasing a ' sophisticated ' method of financing assets that it’s a little difficult to imagine a small start up business using the same financing vehicle, but the reality is, its one size fits all!

Part of the ‘ no brainer' aspect of equipment funding is simply the fact that every type of asset can be financing, including by the way intangible assets such as software and service type contracts.

Business owners sometimes do however actually miss the key basics of lease finance - it’s the lessor who owns the equipment, and you are paying, in effect ' rent ' to use the asset. Naturally at the end of the term of your transaction, depending on how you have structured the transaction you can either own the asset, return it, or invoke other types of flexibility - i.e. temporarily extend, etc.

It's the lease contract, either through a ' master lease ' or simply a one time transaction document that specifies your rights and obligations. Lessors in Canada register their lease under Canada's Personal Property Security Act which allows lenders, creditors, owners, etc to ensure the collateral is properly collateralized and secured.

In fact, here’s a tip. If you want to see who your competitors finance with have your lawyer run a PPSA search and you'll get a list of all secured financings on that competitor. It's a commonly used, dare we say ' trick' by numerous parties for various purposes, and there is nothing wrong with it.

A good way to assess your whole view and use on leasing is to think of it in a couple categories; they include: benefits, risk, documentation, and credit approval.

A tremendous amount of confusion exists out in the Canadian marketplace around the difference between leases and a loan. We can assure you there are differences, and knowing those differences, and how they affect your balance sheet, income statement, taxes, and rights can save you thousands of dollars .

Your business will make the final call, but if billions of dollars are financed under lease equipment funding strategies in Canada every year someone is clearly on to something, and that’s why its prudent to investigate the ' no brainer ' aspects of leasing in Canada . Speak to a trusted, credible and experienced Canadian business financing advisor on getting the best rates, terms and structures for your company or business.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/equipment_funding_leasing_canada_services.html

Best Time To Consider Government SBL loans ? Now! The Canada Small Business Loan Works

Small Business Financing Tailored to your perfection!


Information on government loans in Canada. The attractive rates, terms and structures of this financing make now the time to consider the Canada Small Business loan, aka ‘ SBL ‘.





A whole lot of business relates to good fortune or business smarts around timing. So when exactly should business owners investigate and pursue government loans? We're talking specifically about the Canada small business loan, and our recommendation is: right about now!

When many Canadian business owners or financial managers of start up firms, or firms that are under, say five million dollars in revenue think of a government loan they might tend to think of this as some sort of handout or something involving a strategic tax break of sorts. That’s the farthest thing from the truth around the SBL loan program in Canada.

If we had to describe it simply ( that’s our style by the way ) we'd say it was a specially tailored financing program for new or smaller firms that provides access to funding and financing you normally might not qualify for under more traditional criteria and from those ' traditional' institutions, aka our beloved Chartered banks.

So when you take the time to understand the program, ensure you qualify for it you just might agree with most that its one of the most superior financings in today’s economy.

We're referred several times to the amount of 5 Million dollars as a revenue size. That’s for a reason, which is simply that the program is only offered to firms that have under 5 Million dollars in sales or who are start up, pre revenue in nature. Franchises by co incidence are great candidates for this the Canada Small Busines Loan, technically referred to as the federal BIL/CSBF program.

Recall also that we identified the SBL as being perfect for firms who couldn’t access traditional bank financing. Well, if you are looking for some irony, those same banks that might not have provided you with the financing you wanted are actually the same entities that administer and run the program. How ironic! It's just that the majority of the loan, when approved, is in fact guaranteed to the bank by those good folks at INDUSTRY CANADA in Ottawa.

So are SBL loans one of those secrets only shared and utilized by some. You decide, because for the latest statistics available over. 7000 firms in 2010 used the program for billions of dollars in financing. That might be one of your competitors by the way.

What makes the program so great? The fundamentals are simply very attractive from a financing point of view. Rates are just several points over the bank prime rate, terms are from 5-7years typically, and even items such as leasehold improvements can be financed - those items typically being very difficult to finance under any financing at any time. Actually BIL, the technical term of the program stands for Business Improvement loan.

So, yesterday? Already gone. The future - who knows where your firm will be at. So consider now as the appropriate time to investigate SBL government loans as a vehicle for business financing success. Speak to a trusted, credible and experienced Canadian business financing advisor today on why this program is right, right now!





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing
.Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/government_loans_sbl_canada_small_business_loan.html

Important Lessons On Financing A Franchise In Canada - Franchise Business Loan Success

Financing Those Great Franchise Opportunities in Canada

Information on financing a franchise in Canada , The right franchising business loan is critical to your entrepreneurship success!




It might be a proven business model, but funding that model can be a challenge without the right information and assistance. We're talking about financing a franchise. A franchising business loan done properly is of course what is going to make those franchise opportunities you've chose work.

So is there a cost to buying into what most people recognize as a ' proven system ‘. The essential cost of course is your own personal investment into the business, as the type of financing that you obtain to acquire, and grow your business.

While many clients come to us with the mindset that financing a franchise is a ' start up ' type of business that comes with all sorts of risk and challenges the reality is that in many ways financial institutions and other lenders view this business model a safe way to enter into entrepreneurialism. And that translates, when you know what you are doing, into financing opportunities to create success for your vision.

A typical question we get is whether the type of business or brand or reputation of franchise opportunities in Canada matters relative to the finance challenge around acquiring that business. In general we can say it does not. Of course if you have been lucking enough to acquire the rights or an existing unit with an international brand that is already established that’s one step ahead, but the reality is that each new franchise financing opportunity is typically handled on its own merits.

In Canada you can typically be expected to put in a minimum of 10% permanent equity into your business when utilizing one of the most popular finance programs available to franchisees. However to make that transaction work, and get approved realistically you should be prepared to demonstrate the ability, not necessarily the cash, to fund up to 30 -40% of the acquisition.

Don’t forget also that an existing franchise, wherein you are purchasing for a franchisee who is selling is generally financed under the same mechanisms as a new unit. In Canada it always feels like the majority of franchises are Quick Service type restaurants but given that the franchise industry in Canada represents almost 50% of the economy you can be assure there are lots of other industry business models out there offered by Canadian, U.S. and international franchisors.

If there is one ' trick ' ( can we actually call it a trick?!) to financing a franchise in Canada it probably boils down to being prepared in advance for financing while at the same time working with a franchise financing institution or advisor who has special expertise in this type of finance.

In Canada many of the well known brands in franchising do in fact have relationships and packages available to you with 2 institutions, our chartered banks and one international franchise finance firm. However, we want to make it clear there is certainly no guarantee on financing your new business just because a relationship may have been forged in the past.

A franchising business loan in Canada is most easily accomplished via the federal BIL/CSBF program. This can be complimented by equipment and asset financing as well as working capital solutions that are either entwined or independent of the main financing.

Speak to a trusted, credible and experienced Canadian business financing advisor on franchise opportunities that can be properly financing in Canada.




Stan Prokop - founder of 7 Park Avenue Financial –



http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing
.Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/financing_a_franchise_franchising_business_loan.html

How Asset Based Loans And ABL Financing Provide Superior Canadian Lending Solutions For Your Company

Shouldn’t You Be Considering Asset Based Lines Of Credit?


Information on asset based loans in Canada and how this type of lending and financing via ABL facilities for inventory and receivables generate more cash than traditional bank lines for Canadian business .


It's certainly not an unreasonable question. The question from clients is simple: ' How Do asset based loans via an ABL financing arrangement provide more cash to a business than a traditional lending arrangement '. As we said, fair enough. Let’s explain.

Whether you are a manufacturer, a distributor or wholesaler, or even a retailer with inventory and receivable investments on your balance sheet... well guess what, you need a business line of credit.

A revolving credit facility via either a bank or an independent non bank finance firm provides you with ongoing operating capital to optimize your firm’s growth. Naturally your inventory and A/R are the essential collateral behind asset based loans. As you convert inventory into receivables or cash sales your working capital and cash flow fluctuate, on a daily basis. Naturally along the way there are seasonal or one time bulges in your sales and finance needs.

By monetizing that collateral (our aforementioned A/R and inventory) you create cash flow to keep your business surviving, and, hopefully, growing! Naturally you have one other alternative to all this, which is putting more of your own personal owner equity into the business, or bring in outside capital. That’s allowed by the way, it’s just more expensive and dilutes your ownership - so in general not a good thing for all the obvious reasons.

So back to our question, which was ' how does the abl facility add more cash than say, for example a bank facility '. The answer - it’s all in the margining. By drawing down on better margins on eligible inventory and receivables you accelerate cash flow based on growing sales. In essence you're also turning money over quickly, and those increased turns of your accounts and stock lead to a greater return on equity. That’s a good thing!

So that’s the basic theory behind abl backed revolving credit facilities - let's check into the real world for a minute and demonstrate exactly how that margining might work.


Naturally there are all kinds of ' inventory ' in the Canadian business landscape. And not to complicate things, but that inventory is broken down into raw materials; work in process (‘WIP’) and of course finished goods. By agreement with your ABL lender you create an ongoing borrowing base for your type of inventory, given its cost and salability.

In general we can make the statement that finished goods and raw materials can often be financed anywhere from 30-70 cents on the dollar.
We hate to generalize, but given the variety of inventory it’s safe to say each industry and company is a bit unique in that manner.

So, on to A/R. What's the scoop here? Receivables it can be said are the most coveted collateral by your abl lending and financing partner. Very common advance rates are in the 90% range, and it’s certainly not uncommon if you have good records and a track record to even negotiate one time temporary bulges.

In summary, when you consider that all companies in Canada of any substance are eligible for asset based loans, and giving weight to the fact that they provide more cash flow than traditional bank financing it is safe to say this financing solution should be at least examined by Canadian business owners and financial managers looking to enhance working capital .

Speak to a trusted, credible and experienced Canadian business financing advisor on how your firm can get a better deal on cash flow financing.



Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing . Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/asset_based_loans_lending_financing_abl.html